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Evasive Entrepreneurship

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We argue that evasive entrepreneurship is an important, although underrated, source of innovation, and provide the first systematic discussion of the con-cept. We define evasive entrepreneurship as profit-driven business activity in the market aimed at circumventing the existing institutional framework by using innovations to exploit contradictions in that framework. We formulate four propositions of evasive entrepreneurship and illustrate them with a number of real life examples, ranging from a secret agreement among Chinese farmers in the 1970s to activities of rides-for-hire startups in the modern sharing economy. We demonstrate that while evasive entrepreneurship can either be productive, unproductive or destructive, it may prevent economic development from being stifled by existing institutions during times of rapid economic change. Furthermore, it can spur institutional change with important welfare effects.

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  • Elert, Niklas & Henrekson, Magnus, 2014. "Evasive Entrepreneurship," Working Paper Series 1044, Research Institute of Industrial Economics, revised 31 Mar 2016.
  • Handle: RePEc:hhs:iuiwop:1044
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    Cited by:

    1. Elert, Niklas & Henrekson, Magnus, 2016. "Status Quo Institutions and the Benefits of Institutional Deviations," Working Paper Series 1144, Research Institute of Industrial Economics, revised 15 Mar 2017.
    2. Sanandaji, Tino & Lakomaa, Erik, 2016. "Care, Commons and Entrepreneurship," SSE Working Paper Series in Economic History 2016:2, Stockholm School of Economics.
    3. Niklas Elert & Magnus Henrekson & Joakim Wernberg, 2016. "Two sides to the evasion: The Pirate Bay and the interdependencies of evasive entrepreneurship," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing, vol. 5(2), pages 176-200, August.
    4. repec:eee:jobuve:v:7:y:2017:i:c:p:45-49 is not listed on IDEAS
    5. repec:eee:jbvent:v:32:y:2017:i:5:p:461-475 is not listed on IDEAS
    6. repec:spr:intemj:v:14:y:2018:i:1:d:10.1007_s11365-017-0460-9 is not listed on IDEAS
    7. repec:ejw:journl:v:14:y:2017:i:2:p:196-217 is not listed on IDEAS

    More about this item

    Keywords

    Entrepreneurship; Evasion; Innovation; Institutions; Regulation; Self-employment;

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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